Prescription drug price transparency bill passes Oregon House

A bill that would require cost transparency from prescription drug manufacturers passed the Oregon House on a bipartisan vote Wednesday, with members of both parties calling it a first step toward combating skyrocketing drug prices.

The efficacy of that step was up for debate, however.

"I think this bill is a good attempt at being a good start, but I think it comes up short of being good policy," said Rep. Duane Stark, R-Grants Pass.

House Bill 4005, which now goes to the Senate, would require drug manufacturers to release cost information on a prescription drug if it costs $100 or more for a one-month supply and increases in price more than 10 percent compared to the previous year.

The information companies would be required to release includes: factors contributing to the price increase, the names of any generic alternatives, total sales revenue for the previous year, research and development costs that used public funds, the introductory price of the drug and marketing, manufacturing and distribution costs.

"This bill is not going to solve every problem with prescription drug costs that we're facing all on its own," said bill sponsor Rep. Rob Nosse, D-Portland. "But it is a good start, and what's wrong with a good start."

For companies that fail to release this information by the stipuated deadlines, Oregon could impose a $10,000 per day per violation fine. This was one of Stark's concerns.

Another issue raised during floor debate was whether drug manufacturers could simply not sell qualifying drugs in Oregon to avoid the transparency requirement.

The simple answer, according to Nosse, Rep. Ron Noble, R-McMinnville, and others, is yes.

But they suggested that if companies were to attempt this, the backlash would be a public relations disaster and could accelerate transparency legislation in other states where those legislatures might wonder what the companies are trying to hide.

This concept falls in line with the underlying principle of the plan — creating an artificial drug price increase ceiling enforced by public accountability. Basically, if drug companies go above the 10 percent line, they have to tell the public why. If they stay below, there's an effective slowing of price increases.

That wasn't sufficient for some lawmakers.

"I fail to find any definite cost savings in this bill," said Rep. Cedric Hayden, R-Roseburg.

Even while explaining his support for the legislation, Rep. Knute Buehler, R-Bend, said that the additional transparency requirements are unlikely to reduce prices, but he finds them important all the same.

The part of the bill he wasn't as fond of, he said, is the requirement of companies to release the costs of manufacturing, research and development — informationtypically considered trade secrets.

Those legislative directives could tie up the entire bill in court, undermining the good intentions of the rest of the bill, Buehler said.

"There's a big problem here, but (this bill) is just not very fulfilling," Buehler said. "I'm not confident that this is going to solve the problem."

He added that he wished the bill increased the state's enforcement power, allowing the attorney general to go after companies that engage in price gouging. He introduced an amendment to that effect earlier in the session, and said he hopes lawmakers will consider it in 2019.

In the interest of continuing that conversation, the bill would also create a task force on prescription drug pricing. The 18-member group would develop a strategy to create transparency in pricing along the entire supply chain, including insurers, distributors, wholesalers and pharmacies.

"I like the work group. I like the discussion," Hayden said. "I want it to move forward."

Contact the reporter at cradnovich@statesmanjournal.com or 503-399-6864, or follow him on Twitter at @CDRadnovich